Cassiar Asbestos Corporation Limited

Report of the Directors

To the Shareholders,
CassIAR ASBESTOS CORPORATION LIMITED,

Your directors submit herewith the twelfth annual report on the affairs of your
company including the balance sheet as at December 31, 1963, the statement of operations
and earned surplus for the year ended on that date and your Auditors’ Report thereon.

FINANCIAL

You will note from the attached financial statements that the profit from
operations was $6,682,009 before providing for depreciation, stripping and other write-offs
aggregating $2,482,201 and the current year’s income taxes of $950,000. Of the
remaining $3,249,808 there was transferred to accumulated tax reductions applicable to
future years, $660,000 leaving a net profit of $2,589,808.

During the year under review there was expended on plant and equipment
$1,391,630, stripping $2,442,363, outside exploration $158,698 and dividends $2,376,000.
Working capital decreased by $613,733.

SALES

Sales for the year established a new record for the company, both in volume and
dollar value. Spinning fibre demand was steady throughout the year with sales slightly
less than 1962. The demand for asbestos cement grades was strong and sales increased.

Productive capacity of the industry increased during 1963 with the opening of
several new mines producing principally cement grade fibre. The full effect on the
competitive position of the market will be felt in 1964 but it is anticipated that an early
balance between productive capacity and demand will be reached. There has been a
steady annual growth in the demand for asbestos cement grade fibre which is expected to
continue. With this favourable long-term outlook, the company is continuing its
programme of mine and mill development and exploration in order to take full advantage
of any future expansion of the asbestos market.

RESEARCH

Your company is continuing its programme of research into the treatment and
use of asbestos fibres to ensure that its products will continue to meet competition

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